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Speaker 1: Bloomberg Audio Studios.

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Speaker 2: Podcasts.

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Speaker 3: Radio.

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Speaker 4: News.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Catch us live weekdays

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Speaker 1: at 7 a.m. Eastern on Apple CarPlay or Android Auto

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Speaker 1: with the Bloomberg Business App. Listen on demand wherever you

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Speaker 1: get your podcasts or watch us live on YouTube.

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Speaker 5: We're back to school, folks. It's Labor Day's over. The

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Speaker 5: summer's over. Let's talk to some professionals here.

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Speaker 2: And we started off strong with Jim Caron, CIO of

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Speaker 2: Cross Asset Solutions.

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Speaker 5: Boy, the people at Morgan.

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Speaker 2: Stanley that hand out the titles, they do a phenomenal job.

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Speaker 2: They've got just titles that you just can't imagine. He's

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Speaker 2: at Morgan Stanley Investment Management. Jim, thanks so much for

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Speaker 2: joining us here.

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Speaker 5: Good morning.

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Speaker 2: As we kick off this final three months here, four

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Speaker 2: months of the.

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Speaker 5: Year, what's your top story here?

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Speaker 2: What are you asking your teams to focus on? Or

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Speaker 2: maybe what are your teams telling you they're focusing on?

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Speaker 6: So the top story for me in terms of how

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Speaker 6: we look at multi-asset portfolios is what's going to drive returns.

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Speaker 6: And what's driving returns right now is really factors that

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Speaker 6: align very closely with nominal GDP growth, right? So effectively,

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Speaker 6: what we're getting is a lot of great top line

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Speaker 6: growth in the U.S.

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Speaker 7: Economy.

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Speaker 6: We've had some notable Wall Street analysts upgrade their 3Q

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Speaker 6: GDP forecasts and even for all of 2026. That is

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Speaker 6: something that's going to drive earnings. That's something that's going

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Speaker 6: to support earnings growth. It's going to support profit margins.

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Speaker 6: This is why the equity markets are holding up really,

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Speaker 6: really well. But now I've only told you half the story.

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Speaker 6: The other half of the story is what's going on

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Speaker 6: in bonds. Well, good nominal growth doesn't necessarily distribute itself evenly.

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Speaker 7: It's better for equities. It's not so good for bonds.

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Speaker 6: Because effectively what it's saying is that as nominal GDP

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Speaker 6: rates start to move higher, that actually makes bond yields

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Speaker 6: move higher as well. And as bond yields move higher,

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Speaker 6: the price moves down and it hurts the performance of

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Speaker 6: the fixed income markets.

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Speaker 7: So then what you get is a rotation.

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Speaker 6: Then you have investors that are investing in multi-asset portfolios,

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Speaker 6: you know, diversified bonds and equities, and they're making a choice.

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Speaker 6: And they're saying, do I want to hold more bonds?

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Speaker 6: Or do I want to hold more equities in this

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Speaker 6: higher nominal growth environment?

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Speaker 7: And what they're choosing is equities. So then you peel.

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Speaker 6: The onion back another layer and you say, within equities,

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Speaker 6: how do I start to think about this rotationally? So

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Speaker 6: you start to move to value, to quality, and you

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Speaker 6: start to really broaden out the market. And that's what's happening.

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Speaker 6: So what we are focusing on at Morgan Stanley Investment

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Speaker 6: Management is we are focusing on ways that we can

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Speaker 6: think about generating higher returns without taking excessive risk and

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Speaker 6: what the weight and what the mix between fixed income

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Speaker 6: and equity ought to be.

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Speaker 8: Jim, toss into the mix the Fed meeting next week

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Speaker 8: and your calculation for that.

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Speaker 7: So there's a lot of debate on this.

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Speaker 6: I think the markets have priced that there's a 60%

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Speaker 6: probability that the Fed's going to hike rates next week.

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Speaker 7: I'll say that my view is that they will not.

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Speaker 6: But clearly, that's highly dependent on what happens on Friday

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Speaker 6: when CPI gets released. But what I think is the

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Speaker 6: more important, and I really think it's a two-part question.

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Speaker 6: What I think the more important part to that question is,

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Speaker 6: is if they hike interest rates, How many do they go?

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Speaker 6: Like how many how many times do they hike interest

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Speaker 6: rates going forward? In other words, if they hike next week,

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Speaker 6: does that start a campaign of four to six rate

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Speaker 6: hikes going forward? Is this is this the signaling event

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Speaker 6: that we're going to have a rate hiking cycle in

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Speaker 6: front of us to try to slow down demand in

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Speaker 6: the economy and bring inflation down? and bring inflation lower?

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Speaker 6: Or is it a signal that, well, this is just

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Speaker 6: a fine-tuning. Policy rates are 3.5%. That may be too low.

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Speaker 6: Maybe we'll hike one or two times, and that's it. Well,

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Speaker 6: the market's already priced for that. So if that's the

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Speaker 6: signaling that comes out of the Fed meeting next week,

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Speaker 6: then it's not a negative for riskier assets like equities

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Speaker 6: or even credit spreads. In fact, it could stabilize long-term

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Speaker 6: bond yields a bit more and keep them relatively steady

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Speaker 6: because it addresses the inflation concern risk.

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Speaker 2: So, I mean, one could argue, Jim, and I know

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Speaker 2: it's kind of almost 50-50 at this point, but one

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Speaker 2: could argue that the Fed really has a decent argument

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Speaker 2: to do nothing next week. I mean, the market's already

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Speaker 2: done a lot of the heavy lifting for it. Maybe

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Speaker 2: just sit on the sidelines and maybe see how inflation

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Speaker 2: plays out over the coming periods.

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Speaker 6: Yeah, I think that's really the way that I would

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Speaker 6: think about it. I would think about this as a

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Speaker 6: signaling type of a meeting, meaning that if they hike

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Speaker 6: interest rates 25 basis points, the markets have already priced

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Speaker 6: that in, right?

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Speaker 7: So that's not really a big deal.

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Speaker 6: But if they signal like, look, we've hiked 25 basis

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Speaker 6: points and- You know, this is really just a fine

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Speaker 6: tuning adjustment. This is not the start of a really

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Speaker 6: big campaign. That's actually really positive. I mean, that would

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Speaker 6: actually be a really positive outcome. So it's really a

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Speaker 6: question of how they signal. So it's one of these

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Speaker 6: questions of, you know, listen to what they say. Don't

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Speaker 6: watch what they do. What they do is going to

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Speaker 6: be less relevant than what they actually say. Because this

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Speaker 6: is really about signaling. And that's the key that the

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Speaker 6: market has to sort of catch up with right now.

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Speaker 6: I know we're consumed with, do they hike? Do they

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Speaker 6: not hike? We have an ECB meeting this week. We

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Speaker 6: have the JGB, sorry, Japan meeting next week. Both central banks,

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Speaker 6: the ECB and the BOJ are likely to hike interest rates.

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Speaker 7: At their meetings, but it doesn't necessarily translate into the U.S.

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Speaker 7: having to do so, though.

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Speaker 8: Jim, stocks have proven vulnerable to past jolts in the

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Speaker 8: bond market, not necessarily this time around. Why is that?

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Speaker 7: I'm sorry. So you said that stocks have proven.

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Speaker 8: Vulnerable to some of the jolts that we've seen in

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Speaker 8: the bond market in the past, but not necessarily this time.

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Speaker 8: What are the dynamics that are taking place? Why is

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Speaker 8: this different?

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Speaker 7: Yeah, sorry. Yeah.

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Speaker 6: So what I think is very different right now is

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Speaker 6: really just the earning story. And I'm going to go

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Speaker 6: back to what I said in the beginning is it's

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Speaker 6: a nominal GDP story because nominal GDP is what drives earnings.

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Speaker 6: Nominal GDP is real plus inflation. And that is basically

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Speaker 6: the cash flow that companies are getting cash flows right now.

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Speaker 6: And you were talking about this earlier on your show.

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Speaker 6: are really strong. Nominal GDP growth is really strong. Top

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Speaker 6: line growth is really strong. This is something that equities,

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Speaker 6: higher earnings is mother's milk to equities, right? That's the

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Speaker 6: principal form of valuation whenever we think about valuing an equity.

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Speaker 6: So I think when an equity investor looks at what's

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Speaker 6: happening in the markets, and yes, bond yields have risen,

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Speaker 6: But nominal GDP has risen a whole lot more. And

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Speaker 6: you could make the argument that nominal GDP has risen

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Speaker 6: a lot and bond yields have a lot of catching

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Speaker 6: up to do still before the rise in yields becomes

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Speaker 6: restrictive and it breaks the equity markets. And so that's

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Speaker 6: why we're in this transition phase of catching up, bond

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Speaker 6: yields catching up to nominal growth. And that's why the

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Speaker 6: equity markets have been able to pretty much ignore some

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Speaker 6: of the jolts, as you put it, in the bond

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Speaker 6: markets and the equity markets have kind of looked past it.

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Speaker 6: Because even with yields rising, I mean, you know, look

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Speaker 6: at second quarter earnings. I mean, yields rose and boy,

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Speaker 6: second quarter earnings were pretty, you know, pretty strong.

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Speaker 5: Absolutely.

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Speaker 2: Jim, thanks so much for joining us. Always appreciate getting

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Speaker 2: a few minutes of your time. Jim Caron, he's the

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Speaker 2: CIO of Cross Asset Solutions. Morgan Stanley, investment manager.

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Speaker 5: Thank you. Stay with us. More from Bloomberg Surveillance coming

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Speaker 5: up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on

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Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Yesterday, four o'clock, sitting on the beach, John, toes in

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Speaker 2: the sand, enjoying the Labor Day, thinking, is it too early?

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Speaker 2: my first adult beverage of the day. When I check

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Speaker 2: my work email, which I do all the time because

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Speaker 2: I was trained as an investment banker and we worked

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Speaker 2: 24-7 as opposed to some people who like to think

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Speaker 2: when they leave the office, they don't have to look

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Speaker 2: at their emails.

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Speaker 5: I do all the time.

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Speaker 2: What hits my email at four o'clock is an email

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Speaker 2: from Stuart Kaiser at Citigroup. He said, US equity trading strategy.

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Speaker 2: I read it and it was concise as his notes are.

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Speaker 2: And I walked away thinking, all right, I'm a little

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Speaker 2: bit smarter here.

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Speaker 5: I'm ready to go. I'm ready to go. And Stuart

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Speaker 5: Kaiser instantly Studio. We appreciate it.

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Speaker 2: Stuart, how are you setting up your clients? What are

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Speaker 2: you hearing from your trading clients as they think about

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Speaker 2: this last third of the year here? There's a lot

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Speaker 2: of crosswinds out there, not the least of which is elections,

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Speaker 2: I guess.

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Speaker 3: Yeah, look, I think people are still relatively bullish, but

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Speaker 3: the fact is there's a ton of event risk in September,

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Speaker 3: starting on Thursday with PPI, CPI Friday, and then the FOMC,

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Speaker 3: and then obviously the kickoff to election season as well.

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Speaker 9: So I do think people still want to be long

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Speaker 9: in the market.

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Speaker 3: I think the bar to buy right now is a

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Speaker 3: little higher just because they're respective of all those risks.

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Speaker 3: I think any kind of reasonable dip, call it 2%, 3%, 4%

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Speaker 3: is going to get bought pretty quickly. But until then,

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Speaker 3: I do think investors are going to be just a

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Speaker 3: little bit cautious because of the The calendar really that

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Speaker 3: we face over the next 30 days.

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Speaker 8: And at the end of the day, it's all about

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Speaker 8: earnings and earnings upgrades, at least according to what we

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Speaker 8: track here. The upgrades are on the longest run in

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Speaker 8: about five years. How do you see it?

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Speaker 9: Yeah, it's been an incredible earnings revision year.

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Speaker 3: If you look at forward 12-month S & P earnings,

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Speaker 3: they were 311 at the starting of the year. They're

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Speaker 3: 397 now, which is a stunningly large number. We've sort

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Speaker 3: of termed it trickle-down EPS. You have these hyperscalers that

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Speaker 3: are spending massive amounts of money on the AI CapEx build-out,

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Speaker 3: and that money is just trickling down to the rest

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Speaker 3: of the market. and you're just seeing very broad-based earnings revisions.

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Speaker 9: We expect that to continue.

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Speaker 8: That money is being spent from free cash flow or

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Speaker 8: debt issuance? And tell us that matters. Yeah, look, it's

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Speaker 8: being spent from both.

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Speaker 3: If you look at the average credit spread of those hyperscalers,

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Speaker 3: it's basically tripled over the last 12 months, but it's

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Speaker 3: only 66 basis points. So to your point, you had

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Speaker 3: very strong free cash flow for these companies. They have

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Speaker 3: issued debt. They are spending that free cash. But the

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Speaker 3: bottom line is they're borrowing, you call it 6%, and

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Speaker 3: they're earning, in our estimate, almost 30% on that investment.

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Speaker 3: And almost any finance manager is going to borrow at 6%

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Speaker 3: and invest at 30% if they get the chance. So, yes,

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Speaker 3: there is negative free cash flow for a lot of

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Speaker 3: these companies. But I think if you look back to

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Speaker 3: earnings season, both Amazon and Microsoft, I think, are very,

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Speaker 3: very important because... They talked about the demand, but Microsoft

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Speaker 3: really made the case for the return on investing capital

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Speaker 3: that they're generating. And I think it calmed people down

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Speaker 3: because again, borrow at six, invest at 30 is a

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Speaker 3: trade that any of us would do and our PAs

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Speaker 3: probably too.

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Speaker 2: First time I heard that, read that was yesterday on

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Speaker 2: the beach. AI CapEx will continue as borrowing at 6%

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Speaker 2: to earn 30% is hard to resist. One of our

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Speaker 2: guests said that this morning. So I think that she

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Speaker 2: read your research and got that there. I'm nervous about AI.

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Speaker 2: It's such a big part of the economy. It's such

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Speaker 2: a big part of the earnings story, which is really

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Speaker 2: propelling the market. My concern is, when it ends, how

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Speaker 2: bad is that going to be? Or maybe it won't end.

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Speaker 2: I don't know.

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Speaker 3: Look, it's a reasonable question. I would say Heath Terry

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Speaker 3: on our side, who does our AI forecasting, has about it.

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Speaker 5: I knew him when he was a kid.

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Speaker 9: Yeah, and he's an excellent analyst.

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Speaker 8: Awesome.

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Speaker 3: They have a trillion dollars of CapEx globally next year

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Speaker 3: and almost $ 4 trillion by 2030. So unless these companies

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Speaker 3: pull back the reins, and I don't see them doing

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Speaker 3: that unless they don't expect to earn the return on it,

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Speaker 3: I think we have another few years here of just

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Speaker 3: very aggressive spending.

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Speaker 9: And this is not just a U.S.

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Speaker 2: Story.

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Speaker 3: About two-thirds of all data centers are in the U.S.

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Speaker 3: To do active chat from an AI perspective, you need

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Speaker 3: to be within about 100 miles of the person doing

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Speaker 3: the chat, which means this is a global story. You're

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Speaker 3: going to need data centers built out in China and

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Speaker 3: in Europe as well. So again, I- take your point,

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Speaker 3: but we do expect the spending to continue at least

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Speaker 3: for the next four, eight, 12 quarters.

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Speaker 9: And if that's the case, these earnings numbers are going higher.

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Speaker 8: Equities generally come under pressure from higher yields. Let's talk

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Speaker 8: about risk for a moment. What do you see out there?

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Speaker 3: Yeah, look, I think the 30-year yield, I think, is

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Speaker 3: what people are really paying attention to. And similar to AI,

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Speaker 3: this is a global story. Japanese 30 years got above 4.1%,

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Speaker 3: which is an exceptionally high number for them historically.

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Speaker 9: So I think yields are a risk.

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Speaker 3: We're seeing this morning the Houthis attacking Saudi oil infrastructure.

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Speaker 3: You're getting oil back towards $ 100. So higher yields, higher oil,

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Speaker 3: those are two huge risks to the market. And I

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Speaker 3: think those are persistent. Equity markets have done a very

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Speaker 3: good job of compartmentalizing oil. And on the rate side,

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Speaker 3: I think rates becomes an issue between earnings, if that

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Speaker 3: makes sense. So when we're reporting earnings, equities are happy

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Speaker 3: to ignore all of that.

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Speaker 5: Noise, right?

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Speaker 8: If there's a hike next week, is that the beginning

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Speaker 8: of a cycle, or is it just a one-off?

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Speaker 3: To me, the type of inflation the Fed is trying

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Speaker 3: to fight is persistently above target, right? So I would

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Speaker 3: view this as, call it one or two hikes, and

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Speaker 3: then they'll leave rates there until they see progress on inflation.

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Speaker 3: And that's not the economics view. That's just kind of

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Speaker 3: the meathead markets view. But what's interesting from equity, guys,

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Speaker 3: is to your point, equity investors get worried when you

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Speaker 3: get an inflation cycle, inflation like accelerating higher. This is

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Speaker 3: not that. This is inflation stable just above target. So

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Speaker 3: I think equity investors are just going to have to

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Speaker 3: swallow hard. I think the first couple hikes could be

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Speaker 3: a little bit disruptive. But when equity investors understand that

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Speaker 3: this is just a couple of hikes and it's not

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Speaker 3: going to be an aggressive cycle, I think ultimately equities

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Speaker 3: will be able to deal with that.

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Speaker 2: Are your clients on the Citi trading desk, are they

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Speaker 2: buying protection? Are they buying volatility? What are they looking

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Speaker 2: to do at this point, do you think? Because we've got, again,

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Speaker 2: a lot of stuff happening, whether it's the Fed meeting, elections,

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Speaker 2: there's a lot of uncertainty out there.

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Speaker 3: Yeah, for most of August, we had actually seen clients

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Speaker 3: selling optionality because implied volatility was so high, we had

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Speaker 3: cleared past earnings. What we saw late on Friday was

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Speaker 3: a lot of people buying upside on the VIX, so

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Speaker 3: trying to own volatility, trying to hedge in that way.

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Speaker 3: And I think that was just because the VIX had

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Speaker 3: gotten down to about 14, all the event risk that

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Speaker 3: we mentioned. And I think some clients were saying, you

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Speaker 3: know what, this long holiday weekend, a very quiet August,

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Speaker 3: these hedges have gotten cheap, and we're going to put

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Speaker 3: those on. So we have seen a little bit of hedging,

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Speaker 3: but it was very late last week. I would expect

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Speaker 3: that to continue this week. as portfolio managers are still

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Speaker 3: long and just respect the fact that there's a lot

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Speaker 3: of event risk here. So we went from selling vol

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Speaker 3: to the vol getting so attractive that some hedges got

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Speaker 3: put on late last week.

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Speaker 8: Can you talk individual names or sectors? Where's all the

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Speaker 8: interest right now? I mean, you mentioned AI, of course.

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Speaker 3: Yeah. Look, I would say two areas of interest outside

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Speaker 3: of AI, and any PM we talk to is telling us,

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Speaker 3: give us your even third best idea that's not AI related.

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Speaker 3: And I think the two that have really caught a

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Speaker 3: lot of interest are banks and healthcare, especially banks. Just

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Speaker 3: the regulatory environment's helpful. The capital situation is very positive.

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Speaker 3: And then on the healthcare side, after that Moderna announcement,

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Speaker 3: I think people got really excited about pharma and biotech.

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Speaker 3: So If you look at the consensus portfolio right now,

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Speaker 3: I think a lot of capital goods, which is kind

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Speaker 3: of AI build-out, pharma and biotech banks, and then semis

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Speaker 3: and hardware after that. So again, I would say outside

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Speaker 3: of AI, healthcare and banks would be the two areas

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Speaker 3: where there's a lot of focus.

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Speaker 5: Stuart Kaiser, thanks so much.

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Speaker 9: Appreciate it.

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Speaker 5: Stuart Kaiser, read his research, folks. It's very direct, succinct,

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Speaker 5: to the point.

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Speaker 2: Tells you where the markets are and what he's hearing

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Speaker 2: from clients. And it's very helpful if you're trying to

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Speaker 2: get a sense of what's going on out there.

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Speaker 8: In the markets.

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Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this.

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Speaker 5: We're back at work.

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Speaker 2: If you were a bond investor, I don't think you

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Speaker 2: got the summer off because there were so much new

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Speaker 2: issuance over the summer. And now we've got another deal

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Speaker 2: coming from Amazon. Peter Cheer, he's back at work. He's

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Speaker 2: head of macro strategy at Academy Securities. Peter, we head

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Speaker 2: into the final kind of third of this year, 2026.

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Speaker 2: How are you setting that up for your clients here

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Speaker 2: in early September?

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Speaker 4: I think we're kind of very cautious on bonds and

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Speaker 4: yields globally. I know Besant has talked about bond vigilantes.

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Speaker 4: I don't think that has anything really to do with it.

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Speaker 4: It's just the sheer amount of supply that's coming from

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Speaker 4: corporate America, from sovereigns across the globe. At the same time,

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Speaker 4: some of the countries that used to buy a lot

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Speaker 4: of our debt, like the Saudis, are now having to

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Speaker 4: take out loans. They're having to spend money. So I

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Speaker 4: think there's a supply and demand problem that's just going

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Speaker 4: to push longer-dated yields higher, almost regardless of what the

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Speaker 4: data is.

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Speaker 8: Pete, is there issuance fatigue?

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Speaker 4: You know, I don't think so. I think people are,

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Speaker 4: you know, the story has been pretty well telegraphed. So

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Speaker 4: people have money set aside. I think it's much more

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Speaker 4: a decision. Do I buy 10-year at 4.7% or do

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Speaker 4: I buy one of the hyperscalers at maybe closer to 6%?

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Speaker 4: I think a lot of investors are saying, I would

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Speaker 4: rather invest my money, get 6% from a top-rated hyperscaler

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Speaker 4: than the U.S. government. So I think that's pushing on

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Speaker 4: those yields. I think it'll get absorbed, but it is

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Speaker 4: sucking some capital out of the market.

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Speaker 2: So we got, I don't know, Peter, we got the

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Speaker 2: 10-year at 480, the two-year pushing up to 440.

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Speaker 5: If you're Fed Chairman Warsh, what do you do next week?

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Speaker 4: Well, one, I hope they actually make some progress on

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Speaker 4: their data task forces. I do think when Waller spoke

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Speaker 4: last week, he's correct, right? If you look at the

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Speaker 4: last two or three months annualized, the data is a

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Speaker 4: little bit better. I was just playing around with Atlanta

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Speaker 4: GDP Now. They create their own... core inflation metric. It's

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Speaker 4: actually only at 2.5%. So there's all these things I

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Speaker 4: think that they should look at. And I think the

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Speaker 4: one thing the Fed has to really do is push

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Speaker 4: back on saying, we have two sources of inflation right now,

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Speaker 4: at least in my opinion.

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Speaker 5: One is the war.

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Speaker 4: Hiking rates is not going to help. The other is

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Speaker 4: this hyperscaler buildup, right? The compute buildup is massive. But

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Speaker 4: I don't think raising 50 basis points to 100 basis

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Speaker 4: points is going to stop that, right? These companies believe

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Speaker 4: they're making 10x, 20x. They're going to go ahead. So

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Speaker 4: I think rate hikes is kind of futile right now.

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Speaker 4: So I would stay the course, watch and see how

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Speaker 4: this plays out.

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Speaker 8: So you're going against the grain in terms of the

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Speaker 8: forecasting for hikes from the Federal Reserve, right?

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Speaker 4: Yeah, and I think I really break the world up

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Speaker 4: into two parts. So the front end of the curve

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Speaker 4: is completely determined by the Fed. And I think they're

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Speaker 4: going to kind of be on hold. I think they're

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Speaker 4: going to push back on the need of hiking. And yes,

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Speaker 4: we see the inflation there. But if you hike and

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Speaker 4: it's really not going to help inflation, why would you

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Speaker 4: bother hiking? So I think we see stability.

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Speaker 5: On the front end.

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Speaker 4: And then this long end to me is really supply

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Speaker 4: and demand. So I think yields stick slightly higher there.

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Speaker 4: I think that puts some amount of pressure on equities,

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Speaker 4: but nothing that can't be overcome. And the rest of this,

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Speaker 4: going back to your previous segment, I think across the globe,

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Speaker 4: you're going to be seeing an infrastructure build out. I

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Speaker 4: want to own infrastructure. I want to own energy. I

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Speaker 4: want to own rare earths and critical minerals globally because

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Speaker 4: I think that's the opportunity set.

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Speaker 2: Peter, at Academy Securities, you have the benefit of working

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Speaker 2: with retired senior military folks, generals, admirals. It seems like

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Speaker 2: the market has compartmentalized the wars in Iran, the wars

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Speaker 2: in Ukraine. What are your leaders at Academy Securities saying?

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Speaker 2: How do you think these things will play out? Because, again,

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Speaker 2: the market seems to be looking past them until it doesn't,

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Speaker 2: I guess.

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Speaker 4: And I think that's probably the advice we've been giving

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Speaker 4: to our clients. I think we probably missed an opportunity

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Speaker 4: when we did the initial ceasefire, waited a few weeks,

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Speaker 4: then did the MOU, which then we waited a few

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Speaker 4: more weeks to discover was worthless. That was probably a

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Speaker 4: lost opportunity where maybe if we pressed harder, we could

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Speaker 4: have driven this to a better conclusion sooner. Right now,

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Speaker 4: I think we're in the status quo. We are going

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Speaker 4: to try and blockade them. We're going to put some

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Speaker 4: financial pressure on them. They're going to lash it back

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Speaker 4: out periodically. They're going to try and get the Gulf

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Speaker 4: states to put pressure on us. So I think the

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Speaker 4: market's doing relatively the right thing. Though, again, we're seeing

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Speaker 4: Brent at 98. I think maybe the markets have underplayed

437
00:20:12,430 --> 00:20:14,169
Speaker 4: it a little bit too much. So I think we're

438
00:20:14,190 --> 00:20:15,750
Speaker 4: at that ebb and flow. And I think there's this

439
00:20:15,810 --> 00:20:17,170
Speaker 4: risk right now people are going to have to start

440
00:20:17,190 --> 00:20:19,919
Speaker 4: pricing in not just higher oil prices, but to me,

441
00:20:19,950 --> 00:20:22,409
Speaker 4: it's really diesel. I keep watching diesel very closely. I

442
00:20:22,450 --> 00:20:25,500
Speaker 4: feel that permeates the economy much more. That's ticking higher.

443
00:20:25,800 --> 00:20:26,719
Speaker 4: So I think we've got to be a little bit

444
00:20:26,740 --> 00:20:29,060
Speaker 4: careful there. I think we're a little bit more optimistic

445
00:20:29,100 --> 00:20:31,700
Speaker 4: that come next year, we get some sort of ability

446
00:20:31,740 --> 00:20:33,960
Speaker 4: for something to calm down in Russia and Ukraine. And

447
00:20:33,980 --> 00:20:35,189
Speaker 4: the one thing I think we're all a little bit

448
00:20:35,210 --> 00:20:37,720
Speaker 4: shaking our heads on is, You've seen such a clear

449
00:20:37,760 --> 00:20:41,020
Speaker 4: lesson from Ukraine, how important it is to build manufactured

450
00:20:41,060 --> 00:20:43,400
Speaker 4: drones quickly, get them out in the field, and how

451
00:20:43,420 --> 00:20:46,080
Speaker 4: you can at least slow down an enemy. And I'd

452
00:20:46,100 --> 00:20:47,879
Speaker 4: like to see us, you know, I keep waiting for

453
00:20:47,920 --> 00:20:50,740
Speaker 4: us to show up in Iran with 500,000 drones. And

454
00:20:50,980 --> 00:20:52,619
Speaker 4: it seems like that's probably a longer way than it

455
00:20:52,660 --> 00:20:54,639
Speaker 4: should be for an economy like ours who've seen the

456
00:20:54,680 --> 00:20:55,240
Speaker 4: importance of this.

457
00:20:55,760 --> 00:20:59,480
Speaker 8: Well, at your company, what's the thinking? Is this a

458
00:20:59,700 --> 00:21:02,620
Speaker 8: long-term conflict? Does it end any time soon?

459
00:21:04,130 --> 00:21:07,330
Speaker 4: No, I think we're probably leaning towards we walk away

460
00:21:07,350 --> 00:21:10,310
Speaker 4: a little bit. It doesn't really escalate much beyond what

461
00:21:10,350 --> 00:21:13,300
Speaker 4: it's currently escalating, but it also doesn't completely go away,

462
00:21:13,340 --> 00:21:16,399
Speaker 4: that we're going to have to threaten ships in the

463
00:21:16,460 --> 00:21:18,560
Speaker 4: region periodically, that we're going to have to put there.

464
00:21:18,600 --> 00:21:22,480
Speaker 4: So certainly not a forever war, but maybe a much

465
00:21:22,540 --> 00:21:26,420
Speaker 4: longer-term kind of police action until something really gets resolved.

466
00:21:27,140 --> 00:21:30,149
Speaker 2: So, Peter, the driver for global equities has been earnings,

467
00:21:30,230 --> 00:21:31,669
Speaker 2: and certainly the earnings story here in the U.S.

468
00:21:31,690 --> 00:21:34,780
Speaker 5: Has been app. extraordinary. How do you guys think about

469
00:21:34,820 --> 00:21:35,460
Speaker 5: that going forward?

470
00:21:37,320 --> 00:21:38,260
Speaker 7: I think it's been great.

471
00:21:38,460 --> 00:21:40,320
Speaker 4: One of the things is you start looking at some

472
00:21:40,340 --> 00:21:42,060
Speaker 4: of the earnings, and it's only a portion of it,

473
00:21:42,380 --> 00:21:45,300
Speaker 4: but it's been companies marketing to market their private equity investments,

474
00:21:45,619 --> 00:21:48,400
Speaker 4: things like that that, to me, aren't quite as sustainable.

475
00:21:49,200 --> 00:21:51,160
Speaker 4: All of this still comes down to, is the data

476
00:21:51,180 --> 00:21:53,310
Speaker 4: center AI build as good as it is, and how

477
00:21:53,390 --> 00:21:56,230
Speaker 4: quick is Chinese compute catching up? I'm a little bit

478
00:21:56,250 --> 00:21:59,169
Speaker 4: nervous that Chinese compute is is amping up. There's been

479
00:21:59,190 --> 00:22:01,129
Speaker 4: a little bit of noise in China about rare earths

480
00:22:01,150 --> 00:22:03,709
Speaker 4: and critical minerals. I think they still hold the biggest card.

481
00:22:03,990 --> 00:22:06,030
Speaker 4: So when Trump sits down with Xi, they have been

482
00:22:06,330 --> 00:22:08,470
Speaker 4: working really hard to catch up on compute and data centers.

483
00:22:08,490 --> 00:22:10,330
Speaker 4: They're still way behind us, but they are flooding our

484
00:22:10,369 --> 00:22:14,129
Speaker 4: market with cheap compute, which could hurt our markets. And

485
00:22:14,170 --> 00:22:16,550
Speaker 4: they do have that threat of rare earths and critical minerals,

486
00:22:16,590 --> 00:22:18,450
Speaker 4: which could drive our economy to a standstill.

487
00:22:18,490 --> 00:22:20,050
Speaker 7: So I'm OK with equities.

488
00:22:20,070 --> 00:22:22,030
Speaker 4: But again, I really think we need to build out

489
00:22:22,070 --> 00:22:25,189
Speaker 4: the things that we need to protect ourselves against Chinese influence.

490
00:22:25,230 --> 00:22:26,520
Speaker 5: So It's energy.

491
00:22:26,800 --> 00:22:31,660
Speaker 4: It's smelting, refining, processing. Again, if I'm Canada, that's my

492
00:22:31,700 --> 00:22:33,439
Speaker 4: response to all these tariffs. I try and figure out

493
00:22:33,480 --> 00:22:35,180
Speaker 4: how to smelt and refine my own stuff and sell

494
00:22:35,200 --> 00:22:37,720
Speaker 4: it globally. So I think this is going on. And

495
00:22:37,740 --> 00:22:40,010
Speaker 4: I mentioned this maybe two weeks ago. Australia has now

496
00:22:40,369 --> 00:22:43,570
Speaker 4: announced their first refinery. They're now actually announcing potentially some drilling.

497
00:22:43,590 --> 00:22:45,970
Speaker 4: So you're seeing this trend. That's where I want to

498
00:22:45,990 --> 00:22:47,790
Speaker 4: be heavily invested. You're not taking as much of a

499
00:22:47,810 --> 00:22:49,889
Speaker 4: binary bet as I feel you are right now in

500
00:22:49,910 --> 00:22:51,290
Speaker 4: the hyperscale or compute build.

501
00:22:51,970 --> 00:22:53,910
Speaker 2: Peter, thanks so much for joining us. Always appreciate getting

502
00:22:53,950 --> 00:22:54,760
Speaker 2: a few minutes of your time.

503
00:22:54,780 --> 00:22:55,190
Speaker 3: Peter, cheers.

504
00:22:55,869 --> 00:22:58,929
Speaker 2: He's head of macro strategy at Academy Securities.

505
00:23:00,970 --> 00:23:04,060
Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this.

506
00:23:10,280 --> 00:23:13,859
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

507
00:23:13,940 --> 00:23:17,129
Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on

508
00:23:17,230 --> 00:23:20,490
Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app

509
00:23:20,710 --> 00:23:22,390
Speaker 1: or watch us live on YouTube.

510
00:23:24,060 --> 00:23:27,220
Speaker 2: I'm looking at yields here. Up again a little bit here.

511
00:23:27,260 --> 00:23:30,179
Speaker 2: The 10-year treasury up at basis 0.4 spot.

512
00:23:30,200 --> 00:23:31,899
Speaker 5: Let's call it 480.

513
00:23:31,900 --> 00:23:34,220
Speaker 2: I mean, remember when we traded 4% to 4.5%? That

514
00:23:34,280 --> 00:23:35,220
Speaker 2: seems kind of quaint.

515
00:23:35,460 --> 00:23:36,359
Speaker 8: Are you getting tempted?

516
00:23:36,740 --> 00:23:37,040
Speaker 5: What's that?

517
00:23:37,180 --> 00:23:38,020
Speaker 8: Are you getting tempted?

518
00:23:38,280 --> 00:23:39,399
Speaker 5: Oh, yeah, absolutely.

519
00:23:39,420 --> 00:23:41,139
Speaker 2: I mean, I clip coupons for a living. Look at

520
00:23:41,160 --> 00:23:43,649
Speaker 2: that in a two-year. I mean, I don't have a

521
00:23:43,680 --> 00:23:45,620
Speaker 2: lot of confidence in my government, but I think they'll

522
00:23:45,640 --> 00:23:47,790
Speaker 2: pay me back in two years if I get two-year

523
00:23:47,810 --> 00:23:48,950
Speaker 2: piece of paper and get 4.38%.

524
00:23:48,950 --> 00:23:50,990
Speaker 5: That's not a bad living, right?

525
00:23:51,470 --> 00:23:53,139
Speaker 2: These folks down in D.C. can pay me back in

526
00:23:53,160 --> 00:23:53,980
Speaker 2: two years, I think.

527
00:23:54,680 --> 00:23:56,120
Speaker 8: Right? You would hope so.

528
00:23:56,220 --> 00:23:58,460
Speaker 5: I would hope so. Let's talk to a professional about

529
00:23:58,500 --> 00:23:59,639
Speaker 5: this stuff, Oksana Aronov.

530
00:23:59,980 --> 00:24:03,840
Speaker 2: She's head of market strategy for alternative fixed income at J.P.

531
00:24:03,900 --> 00:24:06,540
Speaker 2: Morgan Asset Management. Oksana, thanks so much for joining us

532
00:24:06,720 --> 00:24:09,879
Speaker 2: here in our studio. What is alternative fixed income for

533
00:24:09,900 --> 00:24:10,260
Speaker 2: you guys?

534
00:24:10,840 --> 00:24:12,899
Speaker 10: Good morning. Thanks so much for having me. Great to

535
00:24:12,940 --> 00:24:13,359
Speaker 10: be here.

536
00:24:13,440 --> 00:24:17,210
Speaker 11: Alternative fixed income aims to the way we define it,

537
00:24:17,260 --> 00:24:21,070
Speaker 11: which is specifically through an absolute return policy. lens, we

538
00:24:21,090 --> 00:24:23,129
Speaker 11: define it as being able to generate a return for

539
00:24:23,170 --> 00:24:26,649
Speaker 11: investors irrespective of whether the environment is a benevolent one

540
00:24:26,690 --> 00:24:28,670
Speaker 11: for bonds or not. And of course, over the past

541
00:24:28,690 --> 00:24:30,910
Speaker 11: five years, we've been in an environment that's not been

542
00:24:30,950 --> 00:24:34,639
Speaker 11: benevolent for bonds. So we were positive in 2022 and

543
00:24:34,660 --> 00:24:38,780
Speaker 11: continue to do so ever since and consistently generate more

544
00:24:38,840 --> 00:24:41,300
Speaker 11: positive returns than your traditional fixed income approach.

545
00:24:41,700 --> 00:24:44,220
Speaker 8: I put this question to Peter Scheer before, but is

546
00:24:44,280 --> 00:24:47,540
Speaker 8: there issuance fatigue? Do you detect that?

547
00:24:48,630 --> 00:24:49,430
Speaker 10: From the Treasury?

548
00:24:50,010 --> 00:24:52,130
Speaker 8: Well, from all across fixed income.

549
00:24:52,850 --> 00:24:55,590
Speaker 11: So the interesting phenomenon is that, of course, the Treasury

550
00:24:55,890 --> 00:24:59,390
Speaker 11: is going through motions to try and bring loan rates down.

551
00:24:59,430 --> 00:25:02,070
Speaker 11: The administration wants lower rates, which, by the way, is

552
00:25:02,130 --> 00:25:04,230
Speaker 11: every administration since the beginning of time. I don't know

553
00:25:04,260 --> 00:25:05,970
Speaker 11: that there ever has been one that did not want

554
00:25:06,020 --> 00:25:09,200
Speaker 11: lower rates. But zero rates are never walking through that door.

555
00:25:09,480 --> 00:25:13,060
Speaker 11: So we should just get used to that reality. That

556
00:25:13,080 --> 00:25:17,120
Speaker 11: was a very particular moment in time. Is there issuance fatigue?

557
00:25:17,160 --> 00:25:20,150
Speaker 11: What's happening is you have a tremendous amount of issuance

558
00:25:20,170 --> 00:25:22,310
Speaker 11: from the Treasury to plug this deficit that we have.

559
00:25:22,369 --> 00:25:24,310
Speaker 11: And at the same time, you have competition coming in

560
00:25:24,369 --> 00:25:28,179
Speaker 11: from high quality hyperscaler issuance or what continues to be

561
00:25:28,200 --> 00:25:31,720
Speaker 11: high quality for now, at least. Hyperscalar spreads are certainly widening,

562
00:25:31,740 --> 00:25:35,179
Speaker 11: meaning they're having to pay more to issue debt. But

563
00:25:35,220 --> 00:25:39,280
Speaker 11: there are some technicals there that are not great for treasuries,

564
00:25:39,680 --> 00:25:44,010
Speaker 11: as well as the overwhelming demand for the treasuries is

565
00:25:44,050 --> 00:25:46,810
Speaker 11: coming from overseas, from our largest holders, such as China,

566
00:25:46,850 --> 00:25:50,670
Speaker 11: such as Japan. So we are definitely very much beholden

567
00:25:50,730 --> 00:25:52,869
Speaker 11: to the dynamics of that demand.

568
00:25:53,550 --> 00:25:56,209
Speaker 2: When I look at the INGO function on the Bloomberg terminal,

569
00:25:56,410 --> 00:25:59,640
Speaker 2: it shows me returns across fixed income. Year to date,

570
00:25:59,680 --> 00:26:01,980
Speaker 2: the best returns in the U.S. have been leveraged loans,

571
00:26:02,660 --> 00:26:05,220
Speaker 2: number one, and high yield, number two. So it seems

572
00:26:05,240 --> 00:26:06,960
Speaker 2: like the market's willing to take credit risk.

573
00:26:07,000 --> 00:26:08,500
Speaker 5: Are you guys willing to take credit risk here?

574
00:26:08,720 --> 00:26:10,470
Speaker 11: Do you know what has done better than high yield,

575
00:26:10,510 --> 00:26:11,710
Speaker 11: or at least as well year to date?

576
00:26:11,730 --> 00:26:12,910
Speaker 10: What's that? The very front end of the curve.

577
00:26:13,030 --> 00:26:13,790
Speaker 5: Is that right?

578
00:26:13,830 --> 00:26:14,030
Speaker 3: Yeah.

579
00:26:14,170 --> 00:26:17,790
Speaker 11: With significantly less risk, you got to the same or

580
00:26:17,890 --> 00:26:21,780
Speaker 11: better place year to date with significantly less ups and downs,

581
00:26:21,800 --> 00:26:24,659
Speaker 11: which is, of course, what keeps investors invested, right? So

582
00:26:24,700 --> 00:26:26,920
Speaker 11: you can't eat volatility, but that's what keeps.

583
00:26:27,710 --> 00:26:30,350
Speaker 10: folks invested, and that's what you want for the long term.

584
00:26:30,369 --> 00:26:32,990
Speaker 11: So that just tells you the fact that the very

585
00:26:33,050 --> 00:26:36,030
Speaker 11: front of the curve, three-month T-bills are pretty much where

586
00:26:36,090 --> 00:26:38,699
Speaker 11: high yield, the riskiest part of the bond market is,

587
00:26:38,760 --> 00:26:40,960
Speaker 11: tells you that the market is kind of like a

588
00:26:40,960 --> 00:26:44,660
Speaker 11: coiled spring in credit, meaning spreads are so very tight

589
00:26:44,720 --> 00:26:46,859
Speaker 11: that everything is moving off of interest rate risk, which

590
00:26:46,900 --> 00:26:50,380
Speaker 11: has not really been the friend of bonds this year

591
00:26:50,580 --> 00:26:54,159
Speaker 11: as yields have moved up. And that's just telling you

592
00:26:54,200 --> 00:26:56,879
Speaker 11: that there's tremendous amount of richness in the credit market.

593
00:26:57,070 --> 00:26:58,350
Speaker 10: And we're seeing late cycle market.

594
00:26:58,380 --> 00:27:01,290
Speaker 2: Well, one of my good ski buddies, longtime hedge fund

595
00:27:01,310 --> 00:27:03,670
Speaker 2: manager on the street, I always loved our chairlift ride

596
00:27:03,690 --> 00:27:05,810
Speaker 2: because he would give me some really cool stock ideas.

597
00:27:06,410 --> 00:27:09,070
Speaker 2: Now he's retired. All he does is roll three and

598
00:27:09,109 --> 00:27:12,350
Speaker 2: six month treasury bills. I mean, hugely boring. I'm no

599
00:27:12,390 --> 00:27:13,129
Speaker 2: fun at all anymore.

600
00:27:13,810 --> 00:27:15,510
Speaker 8: And you could do it through Treasury Direct, too.

601
00:27:15,830 --> 00:27:17,790
Speaker 5: I guess. But that's what you're saying. I mean, even

602
00:27:17,810 --> 00:27:19,210
Speaker 5: the smart people change their work.

603
00:27:19,350 --> 00:27:22,830
Speaker 11: And interestingly, so much of the investment industry, particularly in

604
00:27:22,869 --> 00:27:27,350
Speaker 11: fixed income, has evolved around being fully invested throughout the cycle.

605
00:27:27,710 --> 00:27:30,690
Speaker 11: And sometimes you have to make the most intelligent decision,

606
00:27:30,750 --> 00:27:32,510
Speaker 11: which is where are you going to be on the curve?

607
00:27:32,570 --> 00:27:35,189
Speaker 11: And it doesn't always pay to have duration. Sometimes you

608
00:27:35,210 --> 00:27:37,320
Speaker 11: want to have the least amount of duration and get paid.

609
00:27:37,600 --> 00:27:38,220
Speaker 10: You start it out.

610
00:27:38,720 --> 00:27:41,840
Speaker 11: Asking, are you getting excited about the tens at 4.8?

611
00:27:41,840 --> 00:27:44,179
Speaker 11: I'm excited about twos at 4.37.

612
00:27:44,160 --> 00:27:45,850
Speaker 10: I mean, why not? That's above the Fed funds.

613
00:27:46,430 --> 00:27:49,350
Speaker 11: We're likely not going to see a meaningful hiking cycle

614
00:27:49,410 --> 00:27:51,430
Speaker 11: even if we get a hike or two here, which

615
00:27:51,590 --> 00:27:54,410
Speaker 11: the bar for that even is fairly high. So sitting

616
00:27:54,450 --> 00:27:56,290
Speaker 11: there at nearly 4.4 in.

617
00:27:56,250 --> 00:27:57,270
Speaker 10: The two-year is a great.

618
00:27:58,230 --> 00:28:00,170
Speaker 8: I don't know if this is within your remit, but

619
00:28:00,710 --> 00:28:03,929
Speaker 8: back to issuance. Do we know what the breakdown is

620
00:28:03,990 --> 00:28:10,199
Speaker 8: between companies issuing debt or using free cash flow for

621
00:28:10,240 --> 00:28:12,040
Speaker 8: their investment? What's that breakdown?

622
00:28:12,340 --> 00:28:17,140
Speaker 11: So hyperscalers have pretty much entirely switched to issuing debt.

623
00:28:17,200 --> 00:28:19,720
Speaker 11: And we're seeing their free cash flow going negative in

624
00:28:19,760 --> 00:28:24,050
Speaker 11: some cases, right? Because initially, they funded this CapEx exclusively

625
00:28:24,130 --> 00:28:26,950
Speaker 11: from their cash coffers, which were enormous. And now they're

626
00:28:27,520 --> 00:28:30,360
Speaker 11: funding it almost entirely through debt issuance.

627
00:28:30,800 --> 00:28:31,619
Speaker 8: Because they can?

628
00:28:31,700 --> 00:28:32,460
Speaker 10: Because they can.

629
00:28:32,520 --> 00:28:34,939
Speaker 11: I mean, they're borrowing, even though their borrowing costs are

630
00:28:34,960 --> 00:28:37,179
Speaker 11: going up, the math in their mind is, you know,

631
00:28:37,220 --> 00:28:39,540
Speaker 11: they're spending whatever it is, 6%, but they're in the

632
00:28:39,620 --> 00:28:40,500
Speaker 11: hopes of making 30.

633
00:28:40,500 --> 00:28:42,860
Speaker 8: I mean, do you see that reversing at some point?

634
00:28:42,980 --> 00:28:43,560
Speaker 10: Absolutely.

635
00:28:43,640 --> 00:28:47,160
Speaker 11: I mean, I think that math only works if that

636
00:28:47,160 --> 00:28:49,890
Speaker 11: 30 materializes, and it's not clear whether it does. So

637
00:28:49,930 --> 00:28:53,670
Speaker 11: much of the, not just the investment industry, but our

638
00:28:53,710 --> 00:28:57,720
Speaker 11: economy generally is tied up, tied into this spend. Something

639
00:28:57,740 --> 00:29:00,350
Speaker 11: like 50 percent of our GDP next year is expected

640
00:29:00,380 --> 00:29:02,610
Speaker 11: to come from this AI spend.

641
00:29:02,650 --> 00:29:06,130
Speaker 10: So it is a very important tailwind to the U.S. economy.

642
00:29:06,270 --> 00:29:10,820
Speaker 11: And if the acceleration rate at which they're spending slows down,

643
00:29:10,860 --> 00:29:13,180
Speaker 11: I'm not even saying that it goes entirely negative. If

644
00:29:13,200 --> 00:29:16,420
Speaker 11: the acceleration rate slows down, that does have meaningful ramifications

645
00:29:16,480 --> 00:29:17,220
Speaker 11: for the economy.

646
00:29:17,380 --> 00:29:20,260
Speaker 2: It feels that feels the way you just phrase that

647
00:29:20,700 --> 00:29:21,510
Speaker 2: makes me nervous here.

648
00:29:22,080 --> 00:29:24,220
Speaker 11: Well, we are, if you look at the spend from

649
00:29:24,260 --> 00:29:27,030
Speaker 11: the hyperscalers and compare it to the telecom spend, which

650
00:29:27,270 --> 00:29:30,690
Speaker 11: all parallels are flawed, without a doubt. But we are currently,

651
00:29:30,710 --> 00:29:33,990
Speaker 11: you know, the telecom spend reached kind of one to one,

652
00:29:35,250 --> 00:29:36,830
Speaker 11: one percent, I should say, of GDP.

653
00:29:36,890 --> 00:29:38,110
Speaker 10: We have now doubled that.

654
00:29:38,170 --> 00:29:40,870
Speaker 11: We're at 2% of GDP on the hyperscaler spend, and

655
00:29:40,910 --> 00:29:43,970
Speaker 11: we're on track to get to 3% of GDP by

656
00:29:43,970 --> 00:29:46,750
Speaker 11: 2027 at some point. So we essentially are on track

657
00:29:46,770 --> 00:29:49,760
Speaker 11: to triple the spend that we saw during the telecom era.

658
00:29:49,780 --> 00:29:52,340
Speaker 11: So the amount of money is enormous and has significant

659
00:29:52,380 --> 00:29:53,010
Speaker 11: impacts for us.

660
00:29:53,260 --> 00:29:55,340
Speaker 2: And John Tucker, I was right smack in the middle

661
00:29:55,360 --> 00:29:57,360
Speaker 2: of all that new assurance in the telecom space in

662
00:29:57,380 --> 00:29:59,750
Speaker 2: the late 90s. It was a glorious time you made it.

663
00:30:00,020 --> 00:30:00,560
Speaker 2: heaps of money.

664
00:30:00,600 --> 00:30:01,140
Speaker 10: Until it wasn't.

665
00:30:01,470 --> 00:30:02,990
Speaker 5: Until it wasn't. Exactly.

666
00:30:03,270 --> 00:30:05,720
Speaker 2: So I signed my last contract in February of 2000.

667
00:30:05,720 --> 00:30:08,680
Speaker 2: Talk about timing. Oksana Arnav, she's head of market strategy

668
00:30:08,700 --> 00:30:11,620
Speaker 2: for alternative fixed income at JPMorgan Essendon.

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Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

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00:30:17,110 --> 00:30:21,370
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

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00:30:21,370 --> 00:30:26,790
Speaker 1: 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn,

672
00:30:27,110 --> 00:30:30,190
Speaker 1: and the Bloomberg Business app. You can also watch us

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00:30:30,270 --> 00:30:34,300
Speaker 1: live every weekday on YouTube and always on the Bloomberg Terminal.

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Speaker 11: Thank you.